💫 Summary
The video discusses the current state of the American real estate market, noting that mortgage interest rates have risen to over 7%. This has caused an increased burden for those who have borrowed money for home loans and those who have bought houses in the United States. Additionally, there is a high possibility that rents will rise even in the United States due to inflation and the increased cost of materials and labor.
✨ Highlights📊 Transcript
American real estate is experiencing a significant increase in mortgage interest rates, reaching over 7%, which is the highest level in 20 years.
The 30-year fixed mortgage interest rate in the US has risen to about 7.1%, a steep increase from less than 3% just a year ago.
The burden is increasing for those who have borrowed money for home loans and those who have bought houses in the United States.
For a house worth 500,000 dollars, the interest alone for 30 years would amount to about 400 million won, and the increase in interest is substantial.
The video discusses the potential impact of rising interest rates on the US housing market.
Rising interest rates may lead to a decrease in house prices.
Fixed interest rates in the US allow borrowers to be aware of their situation.
Due to a shortage of about 1.5 million houses, prices are constantly rising.
There was an expectation that the interest rate would drop, leading to potential changes in housing decisions.
The newly built single-family home market in the US is facing challenges with dropping psychological index, rising material and labor costs, and limited building sites.
The psychological index has dropped after 7 months and is at its lowest since May of last year.
Inflation in the US has led to a significant rise in material and labor costs.
Limited city land for building houses has led to Warren Buffett's involvement, but construction stocks may shrink.
People are considering renting instead of buying due to the current situation in the housing market.
Rent prices in London have risen significantly, and there is a possibility that rents will also rise in the United States due to high inflation and increasing interest rates.
The housing index has a big impact on inflation in the United States.
Demand for new construction may decrease due to inflation, but the supply of new construction will also decrease.
There are concerns that if rents rise sharply, it could have an impact on the U.S. price level and job market.
Real estate in the U.S. is considered stable due to high interest rates.
Vacancy rates are increasing in Manhattan due to telecommuting, and the bankruptcy of WeWork is causing anxiety in the real estate market.
Vacancies in Manhattan have increased due to the rise of telecommuting.
The bankruptcy of WeWork is raising doubts about their ability to continue business.
The release of shared real estate in the event of WeWork's liquidation could cause a shockwave in the market.
New York is planning to convert commercial buildings into residential use to address the vacancy issue.
The housing situation in the US, particularly in cities like San Francisco and Silicon Valley, is serious with a high vacancy rate and drug problems.
Vacancy rate in places like Chicago is about 3 to 40%.
Office vacancy rate in cities near Silicon Valley is huge.
Drug problem, especially with fentanyl, is increasing the vacancy rate in Silicon Valley.
The housing situation in the US is concerning.
00:05All the knowledge in the world
00:112nd period, real estate.
00:17interested in real estate these days, so today we'll
00:22talk about American real estate instead of Korean real estate. I heard that American real estate is still quite
00:27good compared to Korea, but
00:29interest rates are so high there too, so
00:31that's a bit much these days. It looks like it's not cool. I'll
00:35take reporter Su-won Jang with you.
00:37Welcome. Hello, American real estate.
00:39I don't want to do real estate either, but I have nothing to do globally
00:48Korean real estate is quiet these days. What about American
00:50real estate? I
00:55heard that the mortgage interest rates there are very high these days. I
00:58'll show you the graph for a moment.
01:01This is now American real estate. This is the
01:0430-year fixed mortgage interest
01:07rate that people usually borrow.
01:08Right now, it's over 7% and
01:11has risen to about 7.1%. If you
01:13look at the last one here,
01:19jumped up really steeply. It seems like it went up from less than 3% just
01:23a year ago. Still, they said it would rise a bit, so it
01:25was about 45%, but if you widen the time series by
01:2723% points in just one year,
01:31it has almost doubled in about two years. Looking at it overall, it is the
01:36highest since 2020, so it is the
01:39highest level in 20 years. It came up.
01:41So, the burden is increasing for those who have borrowed money for home loans and those who have bought houses in the United States. For
01:45example, if you buy a house worth
01:47670 million won in our money, for example, if you
01:49buy a house worth 500,000 dollars, you
01:54will pay about 400 million won in interest alone for 30 years. 1 Even if you bought it a year ago, if you buy it now, the
01:58interest rate is 750 million won,
02:01so it's an increase of about two. Oh, that's
02:04right, but Reporter Jang Su-won, we
02:06also learned a little bit about American real estate. American real
02:07estate From what we learned, the
02:10United States does it all with a fixed interest rate.
02:13It's not a variable interest rate, so
02:16people who took out loans in the past just
02:19keep paying the cheaper ones. That's right,
02:22so even if the
02:24interest rate goes up that much, it
02:26doesn't have a big impact. I
02:28learned something about that. That's right. That's right,
02:302 or 3 years ago, I bought a
02:35house because I got a mortgage. People say that the
02:38interest rate at that time was 2 3%
02:40high, 3 4%, so you
02:44don't have to worry about it because you can pay the main points now. They say it's
02:45easy to change. In the US, that's right, but to
02:48change, basically, the interest rate has to come
02:50down. If
02:52you go up, you ca
02:53n't change, right? Right now, that's the case. It
02:56was a strategy to hold on for now. It doesn't matter if you continue to live in your current home, but for example, what do you do
03:01now for people who have to move?
03:06It's hard. It must
03:07be hard.
03:09But now, people who can endure at least once, but ca
03:11n't. Isn't there also a
03:14standard housing market in the U.S. now, when
03:16interest rates soar sharply,
03:19house prices fall?
03:21However, as you mentioned earlier, in the U.S., there are
03:23so many fixed interest rates,
03:25so those who borrowed in the past are
03:28well aware of their situation. Why, unless it's truly unavoidable, you
03:31just click on that house
03:33because it's burdensome to change houses, so
03:35no more houses are on the market. Since houses aren't on the market,
03:38transactions only focus on newly built houses, and there's
03:40always someone who needs that house.
03:42In the case of the United States,
03:44Basically, it is said that there is always a shortage of about 1.5 million houses in demand for housing.
03:47Yes, because
03:49new people keep coming in, there are
03:53also destructions, and things
03:55like this, so there is always a shortage of about 1.5 million houses,
03:57so now
04:01the prices are constantly rising as new houses are mainly traded. This is the
04:06atmosphere. What is slightly different is that as the
04:09interest rate approaches 6% or
04:107%, the U.S. Federal Reserve
04:13will now normalize it, and there
04:17was an expectation that the interest rate will drop a little. So, whether you
04:22change to a slightly higher amount or build something new, the
04:23interest rate will be lower. There
04:29are people who think that it is worth holding on if prices fall a little, so I bought a new building or changed
04:31houses. So, little by little, house prices
04:34went up without falling, but even if everything
04:36else is destroyed, how can real estate in the United States be
04:40I thought that was okay, but now. As I look at the number 7, my
04:43thoughts change a bit.
04:45Oh, won't the interest rate go up a little more?
04:47Yes, what
04:48will happen then? It
04:51will be a bit of a psychological contraction. It will be a contraction, and
04:53this has already been reflected in the United States.
04:58[Music] The
04:59psychological change in the newly built single-family home market.
05:04There is a housing market index at the National Association of Home Builders, which shows the
05:20Now, it had rebounded again until recently,
05:22but because new construction was
05:24selling so well, it went up a lot, but then
05:33fell around the time when the interest rate rose to the 7% range. This is
05:34based on 50, so if it goes
05:37over 50, this is
05:40the atmosphere of the newly built single-family home market. It's okay if
05:42we build it and sell it, but if it's
05:46below 50, it
05:48's taken as
05:51a bit negative. Ah, for a long time, the psychological index was a bit
05:52good, but
05:56then it dropped. It's now fallen after 7 months, and it's the
05:58lowest it's been since May of last year.
06:00Also, basically,
06:02because there is inflation in the United States, the cost of materials has
06:04risen a lot.
06:06Labor costs have also risen a lot, and it is not
06:08easy to find a building site. Well, the
06:11land is big, but the city land that can be used to build a house is
06:13limited, so
06:15Warren Buffett
06:17bought it. However, there is a high possibility that construction stocks will shrink only when buying now. I am
07:20looking at it like
07:22this and it will happen right away, so now
07:24people who were planning to buy a house are waiting and now they are saying, "
07:26Oh, let's rent rather than buy now.
07:36There is a possibility of switching now. Is it still to
07:40blame? How long will it take for the rebound to happen?" Yes, it
07:42hasn't been that long, so it
07:46won't be as visible right away, but
07:49Sorry, the UK is
07:51a bit similar to other countries, but the UK has also raised interest rates
07:53a lot. The UK has also
07:55raised interest rates by more than 5% in the past year, and in the
07:58UK, the interest rate has also increased significantly. Even in the UK,
08:01more than 90% of the mortgage market
08:03is now at a fixed interest rate. So, even in the UK, the
08:07housing market
08:09has risen a lot even while interest rates are rising. Housing prices
08:13showed a positive increase until last May or June, but are now
08:15declining. It has already started. The interest rate has
08:17already reached a critical point. Instead, the
08:19demand for purchasing the house has decreased, but the
08:22cost has risen, and
08:23a lot of it has been converted to rental, and
08:25these are now reflected in the rental price.
08:31Can you show me the London standard in the United States and the United Kingdom?
08:35The overall rent price increase rate is
08:38rising quite steeply this year. The
08:40red thing is London, and
08:45the rent has risen a lot. It is rising a lot.
08:49In fact, if you look at it this way, there is a high
08:51possibility that rents will rise even in the United States. I
08:53think it is correct to look at it this way, but in the
08:55United States, the
08:57inflation rate is actually high. That's why interest
08:59rates are continuing to rise, and
09:04it's the housing index that has a big impact on inflation. I
09:07don't know about housing prices. The demand for new construction will probably decrease, but as I
09:10said, the
09:14supply of new construction will also decrease a little due to inflation and other things, so
09:16stores will rapidly increase. I
09:19don't think it will fall sharply, but I think it will fall a bit compared to now.
09:21Instead, if
09:24rents are falling so gently now, I
09:28think there might be concerns if rents rise sharply. That's
09:30because residential housing costs now account for a significant
09:33portion of the U.S. price level, and it's quite a lot
09:34right now. The
09:37job market is already good in the U.S.,
09:40but if
09:41rent goes up, it's
09:45so prices
09:48won't rise until the end, but there
09:50is a certain critical mass.
09:52But as you said, if
09:54employment and things like that are still
09:56solid, for example, it
09:58's 500,000 won. You can pay 600,000 won more in rent.
10:00If so, it's going up now. It's
10:04700,000 won, 800,000 won. Oh, I
10:05can't live in this price country.
10:08Then the rent will fall now, but it's
10:11still there again. There's a chance it'll go up. I
10:15think you can see it this way. Real estate in the US is
10:18fixed. I only knew that it was very solid and stable because the interest rate was high, but
10:22that's just the extent of it. If it
10:25goes up more than 7%, would
10:27n't there be no business? That's possible. I
10:31understand. I need to look at this a little more. It
10:36could go down again, but
10:38if the current trend continues,
10:40what kind of
10:42transformation process will it take? I would like to tell you that there may be a bit of a shock wave.
10:46In relation to that,
10:48while we are talking about real estate in the United States, I have one more thing to tell you. The
10:50housing market is still hot.
10:53Well, no matter what the rent goes up, there are almost no vacancies. As I
10:57mentioned last time, It seems like
10:59commercial buildings in the U.S. are in
11:02dire straits right now. It's a very serious situation,
11:04so Chicago and other
11:08cities have done the same. In the past few days,
11:10New York has
11:14announced an urban plan to convert office buildings into housing. The
11:17mayor is really in a commercial market. This is going to be
11:19ruined. There are too many vacancies, so they
11:21must have been thinking about this, so they
11:28announced measures to ease regulations that would lower the threshold for converting office buildings into housing. Recently,
11:31in New York, USA, this is now the case
11:33in Manhattan. As
11:37telecommuting has become more common, vacancies have increased a lot. For
11:40us, that's
11:42not the case. We all
11:43have to come out and work. If you don't show up, just call
11:48us. In the United States, if you don't work from home, you
11:50don't have a company. If you work from home, you don't have a company. They make
11:53phone calls and say things like what are you
11:58I guess it's not like that in the US.
12:01Because of that, the vacancy rate here is close to 20%.
12:04Moreover, the thing that's causing the most anxiety here right now is the
12:07bankruptcy of WeWork. Now
12:10Mihawk is going to WeWork. There
12:12are a few in Manhattan, and they are
12:19renting offices of approximately 190,000 pyeong to 200,000 pyeong in Manhattan, but with
12:25their second quarter performance being so shattered, there are fundamental doubts about their ability to continue the business in their current earnings announcement.
12:33Yes, it has come to that extent. If
12:38the business is liquidated in New York and bankruptcy, won't the
12:41real estate that was shared be released all at once?
12:43Then there will be a huge shock wave, etc.
12:45Now, when you say that kind of
12:49pressure, you say pressure, and if you
12:51say situation, the situation is now around you. Because it is laid down,
12:54New York will also speed up the pace and turn these commercial
12:58into offices.
13:00Most of them will be old offices. We will
13:02convert these buildings to residential use.
13:05But does this mean that the official
13:09will have to sleep on the floor like this?
13:12Offices and residential houses are connected to the pipes.
13:15It's a structure, of course, and it's completely
13:18different from the southern part, so
13:20the cost of constructing and converting it now is
13:23not that high.
13:24So, if you usually do that, you have to
13:27give a lot of tax benefits or other incentives, and now
13:29companies will move, but this
13:32may not be resolved in the long term. They seem to
13:34think that there is, so it's
13:37not like they're temporarily using it as a house, but they're trying to entice them to convert the building.
13:39Well, in
13:43New York, I didn't pay it back, but they say it's
13:45murderous, and looking here, the
13:47monthly rent based on the new contract is
13:504,400 dollars and
13:525.8 million won. That's really a
13:54rat's ass. If you think about it, one room
13:57is the price of most luxury apartments in Korea.
14:01There are 100,000 people who are homeless because they can't go home.
14:04Basically, hundreds of thousands of houses are currently in
14:06short supply, so it
14:11seems like they want to supply housing by any means possible, but
14:13this is what I said earlier. As I said, it is not an easy
14:16situation, so I
14:21am not sure how well it will work. I think we will have to watch the situation a little more.
14:24But anyway, the situation is so serious that, as I
14:26said at the time, the
14:28vacancy rate in places like Chicago is about 3 to 40%.
14:32In particular, as I
14:38said, it has grown based on it. San Francisco and
14:43places near Silicon Valley on the east, and
14:49cities where companies like Silicon Valley on the west are now based,
14:52especially because the office vacancy rate is so huge, things like this are happening
14:54now. They are
14:57coming up with all kinds of measures, but it
14:59seems serious.
15:00Not long ago, I met a person from Silicon Valley, and
15:04the drug problem
15:08is really going crazy because of the drug called fentanyl. These days, there are a
15:11lot of drug addicts on the streets who are publicized as fentanyl and are already
15:13going to work with it. They say they don't like it but they don't
15:16go anymore. They say that it is a very important factor that increases the vacancy rate. The
15:21drug problem, especially in
15:24Silicon Valley, there are so many drug addicts.
15:26Why am I like that zombie?
15:34is in a scary situation these days.
15:39Okay, actually,
15:44there are quite a few people in the U.S. who are watching Understanding. It
15:52would be helpful for us if you posted what the real estate situation in the U.S. is like in the comments on the local situation. Yes, Reporter Jang Su-won,
15:56there's nothing going on with Dunchonju.
16:03In particular, there's a lawsuit there and there's no
16:05update yet. It didn't work. Ah, yes, I'll
16:07update it soon. Thank you, thank you.
16:16Yes, I just
16:19listened to two of them very tightly. We'll take a
16:23break and come back
16:25with a fun science story in part 2 because it's Friday.
16:30Thank you.
16:36[Music] You
16:41can pass it by as you live your life, but
16:45just once in a while. It's
16:48okay to listen to it.
16:51There is Seongeon-ro that is with us every day. Today too,
16:55in the economy
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FAQs about This YouTube Video

1. How have the rising mortgage interest rates impacted the American real estate market?

The rising mortgage interest rates, which have increased to over 7%, have caused an increased burden for those who have borrowed money for home loans and those who have bought houses in the United States. This has impacted the affordability and financial pressure on homebuyers and borrowers.

2. What factors contribute to the possibility of rising rents in the United States?

The possibility of rising rents in the United States is influenced by inflation and the increased cost of materials and labor. These factors contribute to the overall cost of property management and ownership, which may lead to higher rental prices in the market.

3. What are the implications of mortgage interest rates surpassing 7% for homeowners in the United States?

The implications of mortgage interest rates surpassing 7% for homeowners in the United States include increased financial strain, reduced purchasing power, and potential challenges in meeting mortgage payments. This can impact the overall stability of the housing market.

4. How are home loans affected by the current state of the American real estate market?

The current state of the American real estate market, with mortgage interest rates exceeding 7%, has impacted home loans by making them more expensive and burdensome for borrowers. This can affect the accessibility and affordability of financing for prospective homeowners.

5. What are the predictions for the future of the American real estate market in light of the current mortgage interest rates and inflation?

In light of the current mortgage interest rates and inflation, there are predictions of continued challenges for homebuyers and homeowners in the American real estate market. This includes potential constraints on affordability, increased financial pressures, and a competitive rental market.

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